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Insurance brokers condemn latest tax hikeThe National Insurance Brokers Association (NIBA) has slammed the latest recommended increase in the Fire Services Levy (FSL) to be imposed on Victorian insurance policyholders.
For Country Victoria FSL is going up to 84%. When you add in GST & Stamp Duty, $100 in premium now goes to $223 when all levies & taxes are taken into account. This is an additional tax slug of 23% for rural businsess NIBA CEO Noel Pettersen today that given all of the problems with underinsurance and nil insurance after the tragic bush fires it’s impossible to understand how the Government can justify this increase. “Why do people in rural Victoria have to pay more in taxes and charges than they do for the actual insurance policy? It’s absurd.” The National Insurance Brokers Association (NIBA), which represents the professional intermediaries who handle nearly 90% of the commercial insurance business transacted each year, says estimates by insurers show as many as one third of the houses destroyed in the Victorian bushfires were not insured. “Insurance must be affordable to be effective, yet State Government taxes place a simple product like home and contents cover into the ‘too expensive’ basket for many people,” he said. Mr Pettersen said the Victorian and New South Wales Governments collect 75% of the budget for their fire services from insurance premiums. “GST is added on to the total cost of the premium and the Fire Services Levy,” Mr Pettersen said. “Then they add up the total and put state stamp duty on top. It’s a process designed to extract the maximum possible in taxes and adds a significant amount – up to 50% in the case of regional Victorian householders – to the total bill. “Insurance isn’t a sin. They shouldn’t be able to tax insurance at the same rate they do alcohol, or tobacco or gambling. The Victorian bushfires have made it very clear just how bad the situation has become, and affordability is a major factor. “There’s abundant evidence from other states which have changed the funding of fire services to more equitable means like a levy on property rates. Insurance becomes much more affordable for ordinary Australians if it’s free of the Fire Services Levy. “It costs as little as $1.00 per day for home insurance in rural Victoria but insurance taxes penalise policyholders and demand no contribution from those in the community who don’t insure. It’s a ridiculous and unfair situation and it must change urgently for the economic wellbeing of the community. “Insurance buyers should lobby their local member immediately. It’s highway robbery,” Mr Pettersen said. ENDS For further information contact Noel Pettersen on 02 9459 4300 or go to www.niba.com.au/tax NIBA is an independent industry association representing 500 firms and more than 2600 intermediaries, who handle almost 90% of the commercial insurance transacted in Australia. Brokers play a major role in insurance distribution, handling $10 billion in premiums annually and placing around half of Australia’s total insurance business. |
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